Cooperatives Working Together announced Thursday that it is tentatively accepting 343 bids from 39 states for its latest round of dairy herd retirements. This round represents 54,000 cows that produced 1.03 billion pounds of milk last year. USDA projected a 2.3 billion pound increase in milk production for 2007, and this action effectively reduces that projection by 45 percent.

Beginning March 19, CWT auditors will begin visiting those farms to check their milk production records, inspect the herds and tag each of the cows for slaughter. All farmers will be notified no later that April 15 as to whether their bids were accepted.

A total of 1,397 bids were submitted to CWT in this round, a larger sum than the combined number of bids submitted in 2004 (736 bids) and in 2005 (651 bids).

Jerry Kozak, president and chief executive officer of the National Milk Producers Federation, which administers CWT, says that the response by so many bidders was an indication that the timing was right for this retirement.

“The combination of economic indicators that we’ve been monitoring told us that this was the right time to act,” Kozak says. “As a result of the strong response to this next round, we were able to select bids at a much lower cost per hundred pounds of milk removed, and spend less of our overall budget, than we anticipated. This will provide more funding going forward for future herd retirements, and for our very active export assistance program.”

“The next step is for our field auditors to visit each farm to verify the accuracy of the information submitted during the bidding process,” says Walt Wosje, chief operating officer of CWT.

He also says that the program again applied its regional safeguard limits, so that no region of the country will suffer a disproportionate loss of milk supply. Under CWT’s guidelines, safeguard thresholds have been established for five separate regions of the country, limiting the total milk withdrawals possible in each. The only safeguard limit reached was in the Southeast.

Kozak notes that the average herd size, and average milk output per cow, for this round’s accepted bids were similar to national averages.

The total number of bids accepted by region in this round includes:

  • Northeast: 48 farms, 7,195 cows, 138 million pounds of milk, 13 percent reduction of milk.
  • Southeast: 64 farms, 5,710 cows, 92 million pounds of milk, 9 percent reduction of milk.
  • Midwest: 122 farms. 5,902 cows, 101 million pounds of milk, 10 percent reduction of milk.
  • Southwest: 56 farms, 14,519 cows, 280 million pounds of milk, 27 percent reduction of milk.
  • West: 53 farms, 20,611 cows, 416 million pounds of milk, 41 percent reduction of milk.

Source: Cooperatives Working Together